Earnings Reports for Aug. 17

Agilent Technologies, spun off from
Hewlett-Packard earlier this year, reported higher third-quarter earnings and
sales today. It also increased its forecasts for sales growth next year.

The maker of test and measurement equipment earned $155 million, or 34 cents per share, or 33 cents per share on
an unaudited pro forma basis. In the year-ago period, before it went public, it earned $135 million.

The earnings surpassed the forecasts of most analysts, who expected 20 cents per share.

Revenues increased to $2.67 billion from $2.09 billion last year.

Agilent also said it was increasing its forecasts for 2001, and now expects revenue growth of “at least” 20 percent, compared with an earlier forecast of 15 percent. It sees 2001 net earnings approaching 8 percent of net revenue.

CIENA earned $28.2 million, or 19 cents a share, in its third fiscal quarter ending July 31, compared with a loss of $5.6 million, or 4 cents a share a year ago.

The results beat Wall Street expectations of 17 cents a share, according to research firm First Call/Thomson Financial, which tracks analysts’ expectations. Ciena’s revenues rose 80 percent to $233.3 million, compared with $128.8 million a year ago.

CIENA makes equipment that boosts the capacity of fiber-optic networks and products that direct traffic along communications networks. Sales of industry-leading optical networking products contributed to revenue growth and the
company said it expects continued robust sales of its long-distance optical transport products.

Shares of CIENA have jumped about 200 percent so far this year. The company on Tuesday announced a two-for-one stock split.

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Seagram Reports Narrow Loss

Entertainment giant, Seagram, riding a revenue boost from its music unit as well as box-office hits Erin Brockovich and Gladiator, reported a fourth-quarter net loss today that was less than Wall Street had expected.

The company, which is in the process of merging with French
utilities group Vivendi, said its net loss widened to $128
million or 29 cents per share compared with $53 million or 32
cents, excluding an additional gain on the 1998 USA Networks
transactions. Including this gain, the company posted a net
loss of $53 million or 13 cents per share last year. But Wall
Street analysts polled by First Call/Thomson Financial had called on average for a fourth-quarter loss of 35 cents per share this year.

The Montreal-based company that owns Universal Studios and
Universal Music Group, said revenues rose to $3.7 billion in
the quarter from $3.5 billion a year ago and said music
division earnings before interest, taxes, depreciation and
amortization (EBITDA) surged 56 percent to $217 million in the
quarter. Universal Music Group’s EBITDA for the year exceeded
$1 billion for the first time, the company said.

The movie sector returned to profitability, earning $5
million of EBITDA this quarter compared with last year’s EBITDA
loss of $69 million. The improved performance was due to the
theatrical success of the Julia Roberts film Erin
Brockovich, as well as Gladiator and the submarine thriller U-571.

Seagram plans to create Vivendi Universal in a merger with
media giants Vivendi and its cable TV unit Canal Plus. Last
week, the European Commission asked for more information on the
proposed $34 billion deal between before completing its
regulatory scrutiny. Vivendi and Canal Plus say they are
confident the EU will rule in favour of the tie-up with Seagram
before the end of September.

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Limited’s Sales Up 20 Percent

The Limited reported today its second quarter earnings were up 20 percent partly because of strong sales in the Victoria’s Secret and Express clothing brands.

Profits for the quarter that ended July 29 were $77.6 million,
or 17 cents per share, compared with $64.6 million, or 14 cents per
share, in the second quarter of 1999.

Through the first half of the company’s fiscal year, the company
earned $140.5 million, or 31 cents per share, an increase of 29
percent versus the $109.2 million, or 23 cents per share, in the
first half of its last fiscal year.

The company matched industry projections for the quarter, said
Jennifer Black, executive vice president and senior analyst for
First Security Van Kasper.

Results were adjusted to exclude a one-time charge of $13.1
million, or 2 cents per share, for the August 1999 spinoff of TOO,
which operated as the Limited Too girls’ clothing chain.

The company posted a 4 percent overall sales increase and a 6
percent increase in comparable store sales during the quarter. Net
sales were $2.26 billion for the second quarter and nearly $4.4
billion through the first half of the fiscal year.

Bookstore retailer Barnes & Noble posted a
second-quarter loss, in part due to greater-than-expected weakness
in its video game and entertainment divisions. The company also
suffered a loss in its investment activities.

For the three months ended July 30, the New York-based company
lost $8.6 million, or 13 cents per share, compared with earnings of
$23 million, or 33 cents per share, in the year-ago period. Revenue
rose to $924.3 million, up from $727.2 million, the company said
today.

Analysts surveyed by First Call/Thomson Financial were expecting
a loss of 4 cents per share.

Shares of Barnes & Noble fell 75 cents to $17.25 in trading on
the New York Stock Exchange.

Barnes & Noble, the nation’s largest bookseller, said sales at
superstores open more than a year increased 6.6 percent from last
year’s second quarter, helped by strong sales in the children’s
category and what the company called “unprecedented success” of the
latest Harry Potter book.

Harry Potter and the Goblet of Fire has sold more than
500,000 copies through Barnes & Noble stores, the company said.

While video game and entertainment sales through its Babbage’s
Etc. and Funco software and electronics games stores were higher
than expected at $127 million, gross margin dropped, in part due to
lower than anticipated sales of accessories.

The company’s investment activities, which includes formation of
Barnes & Noble.com, resulted in a pro forma loss of 18 cents per
share.

For the six months ended July 29, Barnes & Noble lost $12.7
million, or 20 cents per share, versus earnings of $17.6 million,
or 25 cents per share, in the year-ago period. Sales rose to $1.82
billion from $1.44 billion.

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Staples’ European business saw sales at stores open at least one year grow 18 percent. In addition, the company opened six new stores during the
quarter, bringing the total number in Europe to 149. It plans on opening about 20 European stores this year.

In the United States, Staples said it has 943 stores and has oversight for the 162 Staples stores in Canada.

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J.C. Penney Profits Fall 90 Percent

Department store giant J.C. Penney
said today its operating profits fell
90 percent in the second quarter and warned that results for
the balance of the year would be hurt if slow sales at its
department stores continued.

Penney, the No. 5 U.S. retailer, said income excluding
unusual items fell to $11 million, or 1 cent per diluted share,
from $112 million, or 40 cents a share, in the year-ago
quarter.

Analysts had expected Penney to break even for the quarter,
according to First Call/Thomson Financial.

Quarterly revenues rose to $7.43 billion from $7.31 billion
a year ago.

Penney, which operates about 1,100 department stores and
2,600 Eckerd drugstores, also said the initial public offering
of an Eckerd tracking stock would not occur this year as
previously announced.

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Target Nails Estimates

Target, the No. 4 U.S. retailer,
reported today a 13 percent increase in second quarter operating income, meeting Wall Street expectations, as results
were helped by sales at its upscale discount Target stores.

Target said net income before items in the second quarter ended July 29 rose to $257 million, or 28 cents a diluted
share, compared with $228 million, or 24 cents a diluted share. Year-ago figures reflect a two-for-one stock split
on July 19.

Analysts polled by research firm First Call/Thomson Financial had expected Minneapolis-based Target to report a profit of 28 cents a share.

“We are pleased with our financial performance in the second quarter,” Bob Ulrich, chairman and chief executive officer of Target, said in a
statement. “In addition, we remain comfortable that we will deliver full-year results consistent with our stated goal of 15 percent average annual
earnings per share growth.”

Total revenues in the quarter rose to $8.25 billion, compared with $7.69 billion in the year-ago quarter. Sales in its upscale discount Target Stores
unit rose 9.9 percent to $6.5 billion.

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Ralph Lauren Posts Better Bottom Line

Polo Ralph Lauren, the
clothing designer and retailer, said today that its
first-quarter earnings per share rose by one penny, beating
analysts’ expectations, though net income slipped.

Polo said its earnings in the three months ended July 1 were
$24.0 million, or 25 cents per diluted share, versus $24.1
million, or 24 cents per share, in the year-earlier period,
which included a $3,967,000 or 4 cent per share change from the
cumulative effect of an accounting change. Average shares
outstanding dipped to 97.1 million in the current year period
from 99.5 million a year before.

Analysts had been expecting a profit of 24 cents per share,
according to research firm First Call/Thomson Financial.

Net revenue rose 12 percent to $487.3 million from $434.4
million a year before. Licensing revenue rose to $52.4 million
from $47.9 million in the first quarter of fiscal 2000, driven
by the acquisition of its European licensee, increased sales in
the full-price Polo retail stores and strong demand in the
women’s and children’s licensing businesses.

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United Loses $50 Million Over Labor Woes

United Airlines — which has canceled thousands of flights because of labor woes, bad weather and air traffic control system problems — said today that crew-related disruptions cost the world’s
largest airline $50 million in the second quarter.

The company, whose parent is UAL, is trying to
mitigate the impact by reducing its flight schedule by about 2 percent through September, according to UAL’s quarterly report filed with the Securities and Exchange Commission.

United canceled 614 flights over the weekend and had many hundreds more delayed. It will cancel 3 percent of its flights, or about 2,000 of them, in September.
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For the period ended July 30, Applied said that net income more than doubled to $603.8 million, or 70 cents a share, from profit from operations of $256.1 million, or 31 cents a share, a year ago. Sales rose to $2.73 billion from $1.49 billion. There were no one-time items in the just-completed quarter.

On that basis, the results topped the consensus analyst forecast of 68 cents a share, according to First Call/Thomson Financial, which tracks such figures.

“Our record results reflect customers’ investments in expanded capacity to meet increasing semiconductor demand and in advanced technologies to provide more powerful, portable and affordable semiconductors,” said James Morgan, chairman and chief executive officer in a statement.

In the year-ago period, including one-time items, Applied had net income of $238.3 million, or 29 cents a share. There were special adjustments for its flat-panel business and its acquisition of E-Tek during that quarter.